In more than 40 episodes spanning 75 years, equity and bond fund investors have defied predictions that they would panic and spark crises. Yet banking regulators won’t let go of their “run” scenario. Why?

Brussels to Bucharest: We’re running out of patience

The European Commission will “trigger the rule of law framework without delay” over “major concerns” about the state of rule of law in Romania, according to a letter sent by Frans Timmermans, the Commission first vice president and the European Socialists’ Spitzenkandidat for the European election.

The step will be taken should the country’s government, president and parliament fail to quickly make “the necessary improvements" required “or if further negative steps are taken,” Timmermans wrote in the letter, seen by Brussels Playbook and sent to the heads of state, government, and both chambers of the Romanian parliament.

The EU's rule of law framework “foresees a dialogue to correct the concerns and avoid triggering Article 7 of the Treaty of the European Union,” Timmermans reminded Romania, which currently holds the rotating Council of the EU presidency. The Article 7 procedure is also known as the EU's "nuclear option" as it provides for the most serious political sanction the bloc can impose on a member country — the suspension of the right to vote on EU decisions.

Timmermans' letter, dated Friday, May 10, was sent a day after the end of the special EU summit in Sibiu, which Romanian officials hoped would shape the legacy of its Council presidency, rather than the fact it is the first time a government in the leadership position has faced allegations of disrespecting the EU’s most basic values.

Referring to issues with judicial independence in Romania, Timmermans says in the four-page letter that Brussels' concerns “have increased” this year after the implementation of “a system of strict and extensive disciplinary and new liability of magistrates.”

New rules adopted by Romania’s parliament for reporting bribery “risk creating a situation of de facto impunity for crimes, including corruption crimes,” the letter notes.

Referring to Romania's move to reduce the punishment for abuse of office, Timmermans says “this will have an impact … on the deterrent effect of the underlying criminal provisions.”

Emergency ordinances, used “in situations where it is far from obvious that there effectively is an 'emergency,’” plus the “unpredictability of the legislative process" in Romania, "create further risks to the rule of law."

Overall, the way the Romanian government went about making these "key legislative changes is symptomatic of broader rule of law concerns about the principle of legality, which implies a transparent, accountable, democratic, stable and pluralistic process for enacting laws, legal certainty, the separation of powers and loyal cooperation between different powers of the state,” Timmermans concluded.